OFAC & Export-Control Screening: A Plain-English Guide

There's a whole category of business relationship that can quietly turn a routine sale into a federal enforcement matter, and the maddening part is you usually can't spot it by looking. A new customer, a supplier, a joint-venture partner — before any money moves, you generally need to confirm they aren't on a U.S. government restricted-party list. And "we had no idea" isn't much of a shield here: much of U.S. sanctions law is strict liability, so the penalty can land even when the violation was completely inadvertent. This is the plain-English version — which lists matter, and how to actually screen a name.

The three agencies

Three agencies keep the lists that matter most, and to make life harder, they overlap. Here's who does what.

Treasury — OFAC (sanctions)

• SDN List (Specially Designated Nationals): the strictest. U.S. persons are generally prohibited from any dealings with an SDN, and any assets it holds in U.S. jurisdiction must be frozen (blocked).
• Consolidated (non-SDN) lists: narrower, menu-based restrictions — for example the Sectoral Sanctions (SSI) list limits certain debt/equity dealings rather than imposing a full freeze.

Commerce — BIS (export control)

• Entity List: a license is required to export most items to the party, often with a presumption of denial.
• Denied Persons List (DPL): the party's export privileges have been revoked; U.S. persons generally can't participate in any export with them.
• Unverified List (UVL): BIS couldn't verify the party — a red flag requiring extra due diligence, and license exceptions are unavailable.
• Military End-User (MEU) List: a license is required for listed items over military end-use concerns.

State — DDTC (defense trade)

• ITAR Debarred Parties: barred under the Arms Export Control Act from participating in defense-article or defense-service exports.

How to actually screen a name

The lists are the easy part. Screening well is mostly about not tricking yourself — here's the workflow that holds up.

1. Start with the real legal name, then widen it. Run the registered name plus the aliases and variants a party actually uses. The bad guys rarely trade under the name on the list.
2. Let the match be fuzzy. These lists are full of transliterations and spelling variants — "Mohammed" versus "Muhammad," half a dozen ways to romanize the same Cyrillic name. If you only accept exact matches, you'll sail right past real hits.
3. Treat every hit as a maybe. A name match is a question, not an answer. Before you act on it, confirm you've got the right party using an address, a date of birth, a registration number — something on the official record that pins down identity. Plenty of innocent people share a name with someone on a list.
4. Follow the ownership. Screening the counterparty isn't enough; its owners and officers count too. OFAC's "50 percent rule" means a company owned 50% or more by sanctioned parties is itself blocked, even when it never appears on any list by name.
5. Write it down, and do it again later. Keep an auditable record of what you screened and when — and re-screen, because these lists change constantly. A party that was clean in January can be designated in March.

One catch: screening isn't the whole job

Clearing a party against the lists is necessary, but on the export side it's only half the picture. Whether you actually need a license also turns on what you're shipping (its ECCN under the Commerce Control List, or the U.S. Munitions List if it's a defense article), where it's headed (the EAR Country Chart), and how it'll be used. Those are product-classification questions, and they're a separate exercise from checking a name.

A last, obvious point worth making anyway: this is general information, not legal advice. When there's a specific transaction and real money at stake, get a trade-compliance lawyer involved.